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Hunter v. State Farm Fire and Casualty Co.

United States District Court, W.D. North Carolina, Statesville Division

February 26, 2019

EILEEN HUNTER, Plaintiffs,



         THIS MATTER is before the Court on Plaintiff's Motion for Summary Judgment, (Doc. No. 34), and Defendant's Motion for Summary Judgment. (Doc. No. 38). At oral argument on February 4, 2019, the Court orally granted Defendant's Motion for Summary Judgment as to Plaintiff's unfair and deceptive trade practices claim and deferred ruling on the remainder of Plaintiff's claims. For the reasons stated below, the remainder of Defendant's Motion for Summary Judgment is GRANTED and Plaintiff's Motion for Summary Judgment is DENIED.

         I. Background

         This case involves a dispute over whether damage to the east wall of Plaintiff's house was covered by Plaintiff's property insurance policy. The following facts are undisputed by the parties. Plaintiff's house was constructed in 1999, (Doc. No. 36-5, p. 6), and consists of two levels: a basement level and a main level. (Doc. No. 37, p. 1). Throughout the relevant time period, Plaintiff's home has been covered by a State Farm North Carolina homeowners insurance policy (“the Policy”). Id.

         In 2009, Plaintiff made a claim for damage relating to water intrusion around windows on the east wall. Id. at 2. A State Farm inspection on May 19, 2009 noted evidence of long-term water intrusion, but Defendant denied the claim because the home insurance policy excluded damage from, among other things, “constant and repeated seepage and leakage of water.” Id. In 2013, Plaintiff noticed significant water intrusion into the basement level of the home during heavy rains. Id. Following this incident, State Farm investigated, found that the water had entered the home from an overburdened foundation drain line, and denied Plaintiff's claim because the policy excluded coverage for damage from faulty or inadequate design of the home's drainage system. Id. at 3. These previous denials of coverage are not at issue in this case.

         At some point between 2013 and 2014, Plaintiff hired a window contractor who observed decay in the wooden framing structures of the windows on the east wall of the house. Id. Plaintiff replaced the windows, but water continued to intrude into the wall cavity to cause ongoing decay and damage. Id. In August 2014, Plaintiff's construction consultant, Perry Culpepper, inspected the east wall of the home. Id. Culpepper noted that the living room window header had sagged by one inch and the exterior basement door was difficult to open due to sagging above it. Id. Culpepper determined that the entire east wall needed to be replaced due to rot and degradation of the interior wall framing. Id. at 4.

         On September 22, 2014, Plaintiff filed the claim at issue in this case, stating that the wall was in “imminent and immediate threat of collapsing” due to decay from water intrusion and seeking coverage under the Policy. Id. State Farm retained a structural engineer, Brian Cone, to inspect the home on October 2, 2014. Id. at 5. State Farm denied the claim in November 2014, relying on exclusions in the Policy relating to “collapse and exclusions for deterioration, settling, shrinking bulging or expansion of bulkheads and walls, wet or dry rot, faulty, inadequate or defective maintenance or materials.” Id. Plaintiff requested a reconsideration of her claim on December 10, 2014, stating that Cone had recommended that she refrain from opening the basement door for fear of the entire wall collapsing. Id. Defendant later reaffirmed its denial on Plaintiff's claim. Id.

         Culpepper inspected the east wall of the home again in January 2015. Id. Culpepper noted that the living room window header had sagged an additional one-eighth of an inch from a previous visit. Id. Culpepper recommended significant structural repairs to the wall and advised that a delay in making repairs could lead to the wall's collapse. Id. Also in January 2015, Plaintiff heard a popping noise while staying in the house and discovered that a piece of molding above a main level window had popped off the wall. Id. at 5-6. Plaintiff subsequently provided Defendant with Culpepper's revised report and informed Defendant of the detached molding. Id. at 6. Defendant informed Plaintiff that its position on coverage had not changed. Id.

         In November 23, 2015, Plaintiff contacted Defendant informing them that the condition of the home had worsened after a series of heavy rains in the area. Id. Plaintiff informed Defendant of her intention to repair the home and gave Defendant an opportunity to examine the wall components before repair. Id. Defendant's inspector, Brian Cone, inspected the wall again on December 3, 2015. Id. On this inspection, portions of drywall had been removed and the interior of the wall was visible. Id. Cone observed wood root and staining around the windows and stated that the damage was consistent with long-term water intrusion. Id. Cone recommended that Plaintiff retain a professional structural-design engineer to provide shoring recommendations until repairs were completed.[1] Id. at 7-8. Plaintiff's wall was repaired between March and November 2016. Id. at 7. In November 2016, Plaintiff once again requested reconsideration of her claim, but it was denied. Id. at 8.

         Plaintiff subsequently filed suit in this court. Plaintiff's lawsuit consists of four claims: 1) a declaratory judgment that Plaintiff's damages were covered under the Policy's provisions for “collapse, ” 2) an alternative declaratory judgment that the “collapse” provisions in the Policy are ambiguous, 3) a breach of contract claim for Defendant's failure to pay the covered claim, and 4) a claim for unfair and deceptive trade practices under North Carolina law. (See generally Doc. No. 1). Defendant moves for summary judgment on all of Plaintiff's claims. (Doc. No. 38). Plaintiff moves for summary judgment on the first three claims, but argues that there is a triable issue of fact as to the last claim. (Doc. No. 43, p. 2).

         II. Legal Standard

         A. Summary Judgment Standards

         Summary judgment is appropriate if the movant shows that there is no genuine dispute as to any material fact in the case. Fed.R.Civ.P. 56(a). A party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its burden, the burden shifts and the non-moving party must then “set forth specific facts showing that there is a genuine issue for trial.” See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e)).

         Simply “rest[ing] upon the mere allegations or denials of [a plaintiff's] pleadings” is insufficient to survive a properly made and supported motion for summary judgment. Id. at 586 n.11. Instead, the non-moving party must adduce affirmative evidence, by means of affidavits or other verified evidence, showing that a genuine dispute of material fact exists. See id. at 586-87. “Although the court must draw all justifiable inferences in favor of the nonmoving party, the nonmoving party must rely on more than conclusory allegations, mere speculation, the ...

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